Covestro has successfully signed a contract with its 16 core banks for a new syndicated revolving credit facility for €2.5bn with a term of five years plus two one-year extension options, effective 17 March.
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Covestro signs syndicated revolving credit facility with ESG element
The facility can be drawn in different currencies and will be used as a standby back-up liquidity reserve.
The new facility replaces the existing €1.5bn revolving credit line, which was also a back-up liquidity facility. It provides Covestro with additional financial flexibility and increased liquidity reserves on favourable terms.
One important new element of the facility is the link with an environmental, social and governance (ESG) rating: the better Covestro’s ESG performance, the lower the interest component. In this way, Covestro is underlining its commitment to sustainability and creating its own financial incentives for sustainable business performance.
CFO Dr Thomas Toepfer said: “We decided at the end of 2019 to increase our liquidity resources with a new €2.5bn syndicated revolving credit facility, which is provided by all our core relationship banks. This facility ensures that we have considerable financial leeway over the next few years. By linking the interest on the facility to an ESG rating, we are embedding sustainability as a topical focus in all areas of our business and setting ourselves ambitious targets.”
